Articles Posted in Arbitration Clauses

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The Illinois Appellate Court held that an Evanston long-term care facility would have to face a wrongful death trial in court rather than by arbitration. The panel ruled that the facility’s arbitration agreement was optional and therefore unenforceable. One of the appellate court justices concurred, writing that such agreements are financially motivated.

Cheryl Parker sued Symphony of Evanston Healthcare LLC and Maestro Consulting Services LLC, alleging violations of the Illinois Nursing Home Care Act and common-law negligence under the Survival Act and Wrongful Death Act.

Parker sued in the Circuit Court of Cook County on behalf of Mae Jefferson, a Symphony of Evanston resident. Jefferson designated her daughter Kathy as her agent in an Illinois statutory short form power of attorney for health care.

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The decedent administrator sued Oakbrook Healthcare Centre, alleging negligence while the decedent resided in the skilled nursing facility. Oakbrook moved to compel mediation or arbitration with respect to the counts against it, relying on the arbitration provision within the contract signed by the decedent’s daughter and the nursing home.

The trial court denied Oakbrook’s motion to compel arbitration, finding the arbitration provision substantively unconscionable. Oakbrook then appealed.

The First District Court of Appeals affirmed on other grounds. The arbitration provision was unenforceable because the contract unequivocally provided it would terminate “immediately upon the resident’s death.”

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The Illinois Appellate Court for the First District ruled that Nancy Clanton, as administrator of her mother Laurel Jansen’s estate, does not have to arbitrate Survival Act and Nursing Home Care Act claims against Oakbrook Healthcare Centre.

Clanton’s sister, Debbie Kotalik, used her authority under a power of attorney to sign a contract with Oakbrook Healthcare when their mother was admitted to its facility.

Section E of the contract called for arbitrating disputes and Section F said: “If the resident is compelled by a change in physical or mental health to leave the facility, this contract shall terminate on 7 days’ notice or immediately upon the resident’s death.”

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The Illinois 4th District Appellate Court affirmed the decision of an Adams County Circuit Court judge.  In December 2018, Mark Mason signed numerous documents allowing his mother, Doris Mason, to be admitted to St. Vincent’s Home Inc., a nursing home, including an admissions agreement. The agreement included an arbitration clause and a provision in the contract for services that the contract terminates automatically in the event of Doris’s death.

From December 2018 through October 2019, Doris resided at the nursing home. She suffered a fall, fracturing her left femur on Jan. 14, 2019. She also suffered burns to her right hip five times between Feb. 20 and May 7, 2019.

On Oct. 2, 2019, Doris passed away. Mark filed a lawsuit in December 2020 against the nursing home, WDM Health Services Inc., and three caretakers. Mark alleged violations of the Illinois Nursing Home Care Act, negligence and claims under the Illinois Wrongful Death Act.

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Cecil Smith Sr. was admitted to the Sandpiper Rehab & Nursing facility. Shortly after his admission, he developed a deep sacral pressure ulcer or bed sore that became infected. The opening in the skin caused by the pressure ulcer led to complications that caused Smith’s death less than a year after his admission to the nursing home. He was survived by his wife.

The Smith estate filed a lawsuit against the nursing home facility and other corporate entities, alleging claims under the state’s survival and wrongful death statute. The Smith family claimed that the defendants, the nursing home and its owners, chose not to prevent and treat the pressure ulcer by implementing pressure-relieving measures, providing adequate staff, properly training staff and properly communicating Smith’s needs to the treating nursing home personnel.

The defendants moved to compel arbitration, but the trial court denied the motion.

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The Estate of Lucille Rigoli sued the owners and operators of a nursing home for negligently causing her wrongful death and suffering before her death. She died on May 10, 2016. The court appointed Michael Rigoli to serve as independent executor of her estate.

On March 13, 2018, Rigoli, as executor, filed a complaint against ManorCare of Oak Lawn (West) and Heartland Employment Services, alleging that they chose not to provide adequate medical care to Lucille Rigoli and thus their decisions led to her fall and the fracture of her hip on March 15, 2016. The lawsuit included separate counts against each defendant for wrongful death and for the pain she suffered before her death under the Probate Act of 1975 (755 ILCS 5/27-6, commonly known as the Survival Act).

The Survival Act of Illinois is found in the Probate Act. Section 27-6 (Actions which survive) states that  in addition to the actions which survive by the common law, the following also survive: …actions to recover damages for an injury to the person(except slander and libel), actions to recover damages for an injury to real or personal property.

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Rhonda Stephan, as the personal representative of the estate of Bobby Gene Hicks, appealed an order by the trial court granting a motion to compel arbitration that was filed by Millennium Nursing and Rehab Center Inc. Stephan contended that Bobby Hicks, her father, died in 2015 while he was a resident at Millennium Nursing and Rehab Center, which is a skilled-nursing facility owned and operated by Millennium.

While Hicks was hospitalized at Crestwood Medical Center, Stephan signed all of the paperwork arranging for her father to be discharged from the hospital and then transferred to the rehab center at Millennium Nursing. However, she did not hold a power of attorney for healthcare or any other actual legal authority to act on behalf of her dad or to enter into a contract in his name.

Hicks did not sign any of the paperwork. However, he is named as a party to the contracts included within that paperwork.

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A Kentucky appellate court has held that a nursing home arbitration agreement without specific language allowing an attorney-in-fact to waive a resident’s right to a jury trial was enforceable because of a recent U.S. Supreme Court decision.

In reversing the trial court’s denial of the defendant’s motion to compel arbitration, the appeals panel turned to the U.S. Supreme Court case of Kindred Nursing Centers v. Clark, 137 S.Ct. 1421 (2017). In the Kindred Nursing Centers case, the Supreme Court held that the Federal Arbitration Act preempts the state’s “clear statement rule,” which requires a power of attorney to contain an explicit authorization before an attorney-in-fact may waive a principal’s constitutional right to a jury trial. It was held that this case is substantively similar to the Kindred case.

In the underlying lawsuit, Jamie Free was admitted to Regis Woods Care and Rehabilitation Center, a long-term care facility. As she was being admitted, Jamie’s daughter, Reyetta Smith, signed an arbitration agreement in her individual and representative capacity. Smith later sued the facility and others claiming common law and statutory violations. The defendant moved to compel arbitration. The trial judge denied the motion on the basis that the power of attorney did not grant Smith express authority to sign the arbitration agreement on her mother’s behalf.

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On March 1, 2013, Ann Sanders entered into a residence agreement with the defendant, Victory Centre of Melrose Park, SLF Inc., a licensed supportive living facility. Pursuant to an addendum to the residence agreement, the parties agreed that all claims arising out of that agreement, including those of malpractice, could not be brought in a court of law but would be submitted to binding arbitration.

Later, Sanders, who had diabetes, suffered a diabetic shock and lapsed into a diabetic coma. She was then taken to Gottlieb Hospital in Melrose Park, Ill., where she died on May 21, 2013.

Exactly two years after her death, a lawsuit was filed against Victory Centre of Melrose Park, SLF Inc. alleging negligence and seeking damages in connection with her death. In the complaint, the plaintiff alleged that Sanders’s death was due to the negligence of the nursing home. The lawsuit sought compensation for wrongful death under that statute, the Rights of Married Persons Act (commonly known as the Family Expense Act) and the Survival Act.

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In this case, the Kentucky Supreme Court’s clear-statement rule was held to violate the Federal Arbitration Act by singling out arbitration agreements for disfavored treatment.

The Federal Arbitration Act (the Act) makes arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract,” 9 U.S.C. ¶ 2, establishes an equal-treatment principle:  A court may invalidate an arbitration agreement based on “generally applicable contract defenses,” but not on legal rules that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue,” AT&T Mobility, LLC v. Concepcion, 563 U.S. 333, 339.

The Act thus preempts any state rule that discriminates on its face against arbitration or that covertly accomplishes the same objective by disfavoring contracts that have the defining features of arbitration agreements.

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